15min ES on Friday

Hi Everybody,

The ES on Friday was a perfect example of how traders need patience as well as discipline.

After a good day on Thursday, Friday was quiet. Why do I say this ? Well, (as usual) lets set the larger degree trend with the 15min Chart. As you can see, the 15min ES was up off the DP and Wave C low the prior day. So you should have been looking for buy setups on the shorter term 3 and 5min Chart during Friday.

So let’s see what unfolded in the next post......

Steve

Education, Education, Education.....

What most amateur traders don’t realize is that to become a good trader takes time, effort and therefore experience. But it is such a sad world we live in now, that so many rubbish internet vendors nowadays promise untold riches with little or no effort. For all of you out there with any common sense you should know that this is stupidity. In this world you have to work at anything to become good, and you have to become good to do well. That is just a fact of life. That is why I am doing this Blog, to help you all become better traders and as such be able to make the best use of MTPredictor and its routines.

As you have seen, when the routines in MTPredictor are applied with experience, they can uncover some great trades. In particular, the automatic routines are not designed to be followed blindly, (a computer by itself will never to as well as a human being), so they are designed to “alert” you to a “potential” trade, then (as you have seen in all these examples) the experienced trader uses their experience (for example the larger degree trend) to then choose which setups to take. As you have seen, this can uncover some great trades.

I will do my part, by providing lots and lots of on-going examples, to help you learn and become more experienced, all I ask in return is that you take the time and make the effort to learn from them...........

Thanks, Steve

What of the larger degree trend

OK, I hear you ask – what of the larger degree trend when the 3min TS4 unfolded ?

Well, this is where Education comes in and is why I am spending so much time each day with all these examples, day by day, on this Blog, to “teach” you all how to read charts better, and as such become better traders.

If you look at the 15min Chart to the right, (click to enlarge) you can see how the 15min Russell was declining of nice DP resistance, so the only question was where DP support should come in. Yes the “initial or minor” first level would be taken from the “last minor swing” into the high, and yes we did get a minor bounce off that level. But the main DP’s should always be taken from the most important prior swing highs or Lows. And in this example this would have given us a main DP still lower.

So with this in mind, the TS4 sell was after a rally off minor DP support, but we still had the main DP level much lower, so a further decline was likely. But (as I said on my post below), because this was not perfectly clear, the advanced trader should have brought their stop to break-even closer quicker.

Thanks, Steve

TS4 sell on the 3min Russell

Hi Everybody,

After the initial decline on the US minis yesterday, a rally unfolded off the lows, but what interested me was how this rally unfolded as a 3-swing ABC. As you all know, I like ABC correction’s.

Yes, the larger degree picture was unclear (i will look at that in the next post), so the Advanced Traders among you could have played this TS4 sell on the 3min Russell a bit more cautious than normal and move the stop to break even quicker than normal (after 100% initial risk had been reached).

The result was a nice +6R Profit (ignoring slippage and commission) as the TF declined into the first profit target

But as a note: Isn’t amazing how the cyclical nature of trading unfolds. Just yesterday I outlined how we have had a few hard days and as such we should be preparing for some good (and profitable) days soon, well that is exactly what we got yesterday. All trading goes in cycles, so once you realize this you will not become frustrated on the quiet days as you will know that some good days will be just round the corner....

Thanks, Steve

Automatic DP on the 5min NQ

Hi Everybody,

This is one for the Advanced Traders among you.

So far I have said that the automatic DP’s should be treated with caution, and as such should only be considered when they “line up” with the larger degree support/resistance zones. But there is one other place where the more experienced or Advanced trader can consider them, and that is after a clear 5-wave swing. Yes, “ideally” this should be a perfect Elliott 5-wave swing, but we have found that all it needs is 5 swings. If you look at the chart to the right, here was a good example yesterday on the 5min NQ.

What I also liked about this was that the sell unfolded in the first few bars of the day, so it was almost one of our “gap open” plays as well.

As you can see, the NQ then declined straight though the first DP target to then find support at the lower DP zone, where a nice +5.8R Profit (ignoring slippage and commission) was available.

Again, this is for the more Advanced traders among you, but it a good example of one of the places when the automatic DP’s can be considered.

Thanks, Steve

The answer.......................

Well, this where common sense and experience comes in, two qualities a purely mechanical system will never have !

First, you must know that you are in the quiet part of the cyclical nature of trading cycle (see post below), so you are not anticipating big profits. This is a mistake many amateurs make, they seem to expect big profits everyday this simply does not happen in the real world.

As you can see from the chart, the TF had reached the level of the prior wave b low, but had not quite reached the DP from this low. Yes the DP is the “normal” first target on a quiet day, but what do you do if you are “almost” there.

Well, I would suggest looking to see if you could lower your stop to lock in at least a small profit, And for this I look for minor swing pivots to use. In the Russell there was one at 0.7R Profit, so this made a good place to lower stops to.

As you can see, this is where common sense and experience can help over a purely mechanical system.

Thanks, Steve

A question on the 5min Russell Index

Hi Everybody,

Although it was a quiet day yesterday, there were a few trades, for example this TS3 sell on the 5min TF (Russell Index). However the trade management was slightly tricky, as the trade was nicely in Profit, but did not reach any of the projected targets,. So what should you do in a circumstance like this ?

Please see the chart to the right to see the position. Sitting on a +3R open profit and almost at the DP from the prior minor low.

Thanks

Steve